Which of the scenarios is the best indicator that a nation's Revenue Deficit is present? A) Capital expenditure is greater than capital receipts. B) Total government borrowing is z... Which of the scenarios is the best indicator that a nation's Revenue Deficit is present? A) Capital expenditure is greater than capital receipts. B) Total government borrowing is zero. C) Revenue expenditure exceeds revenue receipts. D) Total expenditure is less than total receipts.
Understand the Problem
The question is asking to identify which scenario indicates a situation where a nation is experiencing a Revenue Deficit. A Revenue Deficit occurs when a government's revenue expenditure exceeds its revenue receipts, meaning it is spending more than it is earning from its regular income sources.
Answer
Revenue expenditure exceeds revenue receipts.
The final answer is Revenue expenditure exceeds revenue receipts.
Answer for screen readers
The final answer is Revenue expenditure exceeds revenue receipts.
More Information
A revenue deficit occurs when the government's revenue expenditure surpasses its revenue receipts, indicating the government needs to borrow money even for its day-to-day operations, highlighting inefficiencies in managing current expenses.
Tips
Confusing between capital and revenue expenditure can lead to incorrect answers. Remember, revenue deficits relate specifically to revenue, not capital.
Sources
- Budget and Accounting Glossary - finance.vermont.gov
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